Fears over 800 chip plant jobs

NEC is restructuring its businesses

Electronics giant NEC is refusing to deny reports it is planning to cut 800 jobs at a Scottish computer chip factory.

A report in a Japanese newspaper says the company is to halve its workforce of 1,600 at a factory in Livingston which makes D-RAM chips.

A spokesman said the Japanese company could not rule out cuts at its Scottish plant as the company restructures its business in Europe.

The news is a further blow to both West Lothian and Scotland's electronics industry, which last month lost 3,000 jobs with the closure of the Motorola mobile phone plant.

The plant produces microchips for computers

NEC began a global review of its operations two months ago, prompted by a continuing world-wide slump in the market for computer chips.

At the time, 700 jobs were cut at a California plant when the company halted the production of unprofitable D-RAM chips used in personal computers.

The Livingston facility also makes D-RAM chips - and NEC has already admitted it would like to switch production to a more profitable product.

The question now is whether that will result in redundancies.

Japanese business newspaper Nikkan Kogyo thinks it will, saying up to half the workforce of 1570 could go.

Spokesman Daniel Mathieson said: "Two months ago we cut staff in the US and now they're examining how to restructure the UK as well as China and other areas.

Union fears

Asked if this could include layoffs at the Scottish plant, he said: "We can't rule it out."

Union leader Danny Carrigan of the AEEU said he "fears the worst" over the future of the plant.

Danny Carrigan: "Axe may fall"

He said the union's research department had indicated there could be an announcement imminent.

He added: "In general, the workforce throughout the electronics industry and the so-called knowledge economy will have been worried for some months because we never know where the axe is going to fall next."

Livingston MSP Bristow Muldoon said: ""I'm deeply concerned about the reports because I obviously am aware that NEC have been facing quite considerable difficulties for some time.

"Most notably the price they are able to sell their products for which I believe has fallen from $18 to less than $3 per unit over the last number of months.

"Obviously, what I will be intending to do today is to discuss with the enterprise minister what the government can do to ensure that NEC recognise that they are a valued part of the Scottish economy."

A spokesman at the Livingston plant said that reports of job losses were pure speculation.

He said the company was considering a range of options for offsetting the global downturn in demands for its product, and these might include a possible restructuring of the Livingston plant.

It is understood that senior management will fly to Japan on Wednesday in an effort to secure extra products for manufacture at Livingston.